• Risk iStock_000016809464SmallGhana – a profound lack of trust;
  • India – sharply hiked tariff on sugar imports;
  • Mongolia – hopes for increased FDI due to legal changes;
  • South Africa – yet another mining strike;
  • Zimbabwe – expectations of stepped-up foreign investment.

AUSTRALIA: The Aussie should have good support in the weeks ahead. The Reserve Bank is likely to keep interest rates where they are. Worries about a hard landing by the Chinese economy are fading. The budget for the current financial year is disciplined and tough, which is good for the economy, if not for the government’s popularity.

CHINA: The government remains concerned that the economy may not live up to its expectations this year. The latest signals are encouraging, however, indicating that a soft landing is still in the cards. On the geopolitical front, China is now trying to bolster its claims in the South China Sea by building islands Dubai-style.

INDONESIA: With presidential elections just around the corner, the race has tightened and has become distinctly dirtier. If investor sentiment deteriorates any more, the winning candidate will face a choice between further rupiah weakness or higher interest rates.

KENYA: Investors still have a keen interest in this country, but its growth outlook is dimming as alarming and still deteriorating security conditions undermine one of the most important segments of the economy, tourism. They also undermine plans for an East African trade hub. President Kenyatta’s ham-fisted response is not helping.

PAKISTAN: A new anti-terror law has been passed. It follows the start of a military ground offensive against jihadis in North Waziristan that is not likely to put an end to their activities in Pakistan. In the economic arena, PM Sharif is at present mainly concerned with narrowing the budget deficit to meet the terms of an IMF loan.

PERU: A slew of draft laws may persuade Moody’s to join S&P’s and Fitch in raising the country’s credit rating. The economy is doing quite well, even though its growth has slowed. The sol will stay on a gradually sliding trajectory and the external accounts will remain easily manageable.

UNITED ARAB EMIRATES: The local stock market is still highly volatile, but the selloff is overdone. Property speculation conjuring up the risk of a new housing bubble is being dealt with. The country has increased the transparency of state holding companies to encourage investors. But geopolitical risks remain considerable, which explains the introduction of compulsory military service.

UNITED KINGDOM: The BofE’s reintroduction of credit controls makes sense, directed, as it is, specifically at the housing market.  PM Cameron’s fight against the nomination of Jean-Claude Juncker as the next President of the European Commission was a lose-lose proposition from the outset.

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